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How Financial Guardians Can Help You Achieve Your Financial Goals - Outside View by PersonalFN

How Financial Guardians Can Help You Achieve Your Financial Goals

Feb 16, 2017

Most of us dream of what we'd like to become at a later stage in life or the things we'd like to do. When it comes to our money, these dreams must be translated into clear goals to employ the best way of achieving them.

Typical aspirations in the world of financial planning could range from funding your child's education to saving enough for a comfortable retirement. The key is to be realistic about what you think you can achieve, you're confident in your ability to win.

No sales obligation: A CFG shares his compensation model upfront. This approach builds trust and assures you as investors that a CFG has puts forth your interest in mind at all times. CFGs go a step further. They cement the relationship with clients by understanding their current financial health as well as the investment objectives before recommending any financial products.

Protects you and your family: A CFG will ask you tough questions you may not have thought of: For example, "Have you saved enough for rainy day?", "Have you ensured the financial wellbeing of your family when you pass away", "Have you written a Will to pass on assets to your loved ones?" amongst a host of others. The idea behind is to make you rightly introspect to recognise the nuances of financial planning.

Avoid costly mistakes, administration costs, investment fees, and taxes: These are some of the costs novice investors miss while planning their financial future. A CFG is aware of these and the impact on your financial goals. Therefore, they can prudently suggest an alternative course of action.

Set time frames for your financial goals: Good financial advice helps you set and plan financial goals. A CFG will assess if your financial goals are S.M.A.R.T. (Specific, Measurable, Adjustable, Realistic and Time-bound) or are mere fantasies. Based on the time horizon to achieve it, he/she can classify the goals into short-term, medium-term, and long-term. This helps you maintain focus and channelize investments accordingly to achieve them.

Prioritise financial goals: We all have multiple financial goals and all of them seem important to us. Planning for them can be a herculean task if you don't prioritise them. So, based on the urgency and the time horizon, a CFG can help counsel you to distinguish between: responsibilities, needs, and dreams.

Children's education is a 'responsibility' that needs to be shouldered.

Buying a house to live in and saving enough for a comfortable retirement are a 'needs'.

On the other hand, wanting to own high-end luxury cars, or going on a world tour, could be a 'dream', which may be within reach (can be planned for) or beyond (cannot be planned for) based on a financial assessment.

Your financial life will be stressful if you fail to slice and dice your financial goals well. A CFG looks at your plan objectively. They are rational, rather than emotional, which will help you immensely in the goal planning exercise.

Draw a prudent financial plan: A CFG possesses skills to draw a prudent financial plan to take better control of your personal finances and meet your aspirations vide a variety of investment avenues. This is intended to achieve the investment objectives and build the required goal corpus taking cognisance of your risk profile. Besides, he/she will periodically review the plan to ensure you're on course, make necessary corrections if need be, and even account for changing dynamics (a new member into the family, a medical emergency, an unexpected layoff, etc.). So through this agile approach there's enough goal mapping and goal tracking.

Leave a legacy: A CFG will help you assist in prudent estate planning to make sure your family is financially secure when you pass away. Note that, if you die intestate (i.e. without a Will) the law of the land will distribute your assets in a manner which you may not have intended.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

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